One.Tel case could cost $37m

A special purpose liquidator pursuing debts owed to the failed One.Tel phone company estimated a court case against executives from
News
Ltd., PBL and Consolidated Press Holdings could cost up to $37 million, it has been revealed in court.

In the NSW Supreme Court yesterday, News Ltd lawyers said they wanted to get confidential evidence from the liquidator, Paul Weston, to support their attempt to have the proceedings dismissed.

James Lockhart, SC, a barrister acting for News Ltd and its executives, said his clients were being “pre­judiced by the delay" as Mr Weston didn’t start legal proceedings earlier.

In August, Mr Weston served a $244 million claim alleging executives from News Ltd, PBL and CPH – Lachlan Murdoch and James Packer among them – set out to dupe One.Tel’s independent directors by claiming the company would fail without an injection of at least $280 million. News Ltd is Australia’s biggest newspaper company and part of New York-based
News Corp
.

As liquidator, Mr Weston claimed One.Tel independent directors voted late on May 29, 2001, to cancel a $132 million share issued only after Mr Murdoch, Mr Packer and others knew how the directors would vote. The liquidator alleged it was an un­commercial and insolvent transaction only News and PBL gained from.

Mr Weston applied four times to have the time in which he could serve the claim extended. He filed the claim in May 2007, but only served it on News Ltd and the other companies and individuals in August this year.

For each of these applications he filed confidential evidence with the court which included legal strategy and identities of potential funders for the litigation, his lawyers said. News Ltd wants access to them.

Anthony D’Arcy, a barrister representing Mr Weston, said yesterday it took so long to serve the claim because he was awaiting the outcome of a related court case and needed to find someone to fund the litigation.

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Mr Weston said in an affidavit there were insufficient assets as special purpose liquidator of One.Tel to fund the proceedings. One.Tel had $9.45 million worth of free cash, with a possible additional $8 million to $9 million to come, his lawyers said.